Joe Hockey's right - (nearly) everyone is against him

BusinessDay contributing editor

Insulated from the average citizen by his cheer squad: It's not easy being Joe Hockey this week. Photo: Alex Ellinghausen

It’s not easy to be sure who’s criticised Joe Hockey more this week – the Labor Party or his own side, whether on the record or off. Walking around with a sign on his back saying “kick me” probably didn’t help.

Let me restate upfront that I think the budget proposal to reintroduce the CPI indexation of fuel excise is a sound one. It’s as good as any indirect taxation and better than most. Indexation only maintains the tax’s effective rate, it does not increase it. Our proportion of indirect taxation has been slipping to a less than ideal proportion of the tax mix. Like a price mechanism for carbon, it’s hard to find a credible economist who’s opposed to it.

My suspicion remains that Labor, thinking it might occupy the Treasury benches again one day, was secretly relying on the Greens passing the excise thing, but you’re in trouble if you’re relying on the Greens to do anything sensible on the tax front.

It’s no surprise people don’t like the idea of paying more for fuel – I’m not aware of anyone who likes paying more for anything – but that doesn’t mean it’s wrong.

But there are ways to reasonably lead people into accepting something they don’t like. And then there’s Joe Hockey. As John Hewson suggests elsewhere on these pages today, Hockey has becomes the Budget’s worst enemy.

Hockey’s political tin ear comes at a cost to the country. The Westpac Melbourne Institute consumer sentiment survey showed a small pickup in confidence, but pessimists still outnumber optimists and the most pessimistic group remain Labor voters with a score of 86.4. And the polls tell us there are more Labor than coalition voters these days. A little empathy, rather than dismissal, wouldn’t do any harm.

It seems to me that Hockey is insulated from the average citizen by his cheer squad, listening more to the right wing ideologues, Young Liberal-style staffers and the fund raiser types who pay to have lunch with him. Hence the danger of an echo chamber convincing the Treasurer that it’s a matter of his ideological purity against the world.

And Joe is making it worse. There was a fortuitously-timed opinion piece earlier this week by the Australia Institute’s Richard Dennis warning that the National Party represents some of the nation’s poorest electorates, electorates particularly hard hit by several of Hockey’s budget measures. That sugeests the biggest Senate problems for the budget might not come from Big Dog’s PUPpies.

The poor-people-not-driving-line is particularly bad when contrasted with Hockey’s cheap populism before the election in rescuing the salary packaging industry with its novated lease lurk.

Poor people might not drive as much as the well off, but a great many who aren’t poor drive cars subsidised by everyone else. I’m guessing the average constituent in a National Party seat doesn’t have a novated lease either.

On second thoughts, maybe Joe is right – maybe everyone really is against him.